Kuwait has set off shockwaves in the crypto community by imposing a comprehensive ban on all cryptocurrency transactions, investments, and mining activities.
The Capital Markets Authority (CMA) of Kuwait officially confirmed the “absolute prohibition” of virtually all crypto operations within the country.
This blanket ban, announced on July 18, positions Kuwait as the latest jurisdiction to take a firm stance against virtual assets like Bitcoin (BTC) and Ethereum.
UNDERSTANDING KUWAIT’S CRYPTO BAN
The Capital Markets Authority (CMA) of Kuwait has issued a circular addressing the supervision and issuance of virtual assets in the country.
This circular unequivocally affirms the prohibition of major crypto use cases, including payments, investments, and mining activities.
The stringent measures are taken in line with the country’s commitment to mitigate potential risks and negative consequences associated with cryptocurrencies.
ALIGNING WITH INTERNATIONAL RECOMMENDATIONS
Kuwait’s regulatory authorities, including the Central Bank of Kuwait and the Capital Markets Authority, have jointly issued circulars to address the recognition and use of virtual assets within the country.
These measures are consistent with the recommendations put forth by the Financial Action Task Force (FATF) to combat money laundering and terrorism financing effectively.
The Capital Markets Authority (CMA) of Kuwait highlighted that any violations of the country’s Anti-Money Laundering laws would be met with appropriate penalties.
The stipulations for these penalties are laid out in Article 15 of Law No. 106 of 2013, underscoring the seriousness with which Kuwait is approaching the issue of virtual asset transactions.
RAISING PUBLIC AWARENESS
In response to the growing interest in virtual assets like Bitcoin, Ethereum, and Dogecoin, the regulatory authorities in Kuwait have undertaken awareness campaigns to educate the public.
These campaigns focus on highlighting the highly volatile nature of cryptocurrencies and the lack of supervision or regulation in the country.
By doing so, the authorities seek to protect the public from potential financial risks and scams associated with these assets.
CENTRAL BANK’S ENHANCED OVERSIGHT
The Central Bank of Kuwait has implemented a series of measures aimed at enhancing oversight and control over financial activities involving virtual assets.
It has outlined 46 transactions and procedures that require prior approval before execution by companies, banks, and supervised entities. This includes actions involving joint-stock companies, both public and closed, and companies under the bank’s supervision.
Additionally, adherence to international codes and classification of economic activities is emphasized when adding or changing activities in commercial licenses.
Kuwait’s decision to enforce a blanket ban on cryptocurrency transactions, investments, and mining activities signals its strong commitment to safeguarding its financial system and protecting its citizens from potential risks associated with virtual assets.
The country’s regulatory authorities, in adherence to international guidelines, have implemented stringent measures to combat money laundering and terrorism financing.
As the crypto community grapples with the impact of this ban, Kuwait stands firm in its resolve to regulate its financial landscape effectively.